SENATE BILL NO. 792
A bill to amend 2000 PA 146, entitled
"Obsolete property rehabilitation act,"
by amending sections 2, 6, 7, 14, 16, and 17 (MCL 125.2782, 125.2786, 125.2787, 125.2794, 125.2796, and 125.2797), section 2 as amended by 2006 PA 70, section 6 as amended by 2013 PA 115, and section 16 as amended by 2016 PA 222.
the people of the state of michigan enact:
(a) "Commencement of the rehabilitation" means the date the first building or other trade permit is issued related to the rehabilitated facility, unless sufficient documented proof can be provided to show that rehabilitation did not start until a later date. Commencement of the rehabilitation does not include demolition activity, or the issuance of a demolition permit, that occurs before the issue date of the first building or other trade permit.
(b) (a) "Commercial housing property" means that portion of real property not occupied by an owner of that real property that is classified as residential real property under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c, is a multiple-unit dwelling, or is a dwelling unit in a multiple-purpose structure, used for residential purposes. Commercial housing property also includes a building or group of contiguous buildings previously used for industrial purposes that will be converted to a multiple-unit dwelling or dwelling unit in a multiple-purpose structure, used for residential purposes.
(c) (b) "Commercial property" means land improvements classified by law for general ad valorem tax purposes as real property, including buildings and improvements assessable as real property pursuant to under sections 8(d) and 14(6) of the general property tax act, 1893 PA 206, MCL 211.8 and 211.14, the primary purpose and use of which is the operation of a commercial business enterprise. Commercial property shall also include includes facilities related to a commercial business enterprise under the same ownership at that location, including, but not limited to, office, engineering, research and development, warehousing, parts distribution, retail sales, and other commercial activities. Commercial property also includes a building or group of contiguous buildings previously used for industrial purposes that will be converted to the operation of a commercial business enterprise or a multiple-unit dwelling or a dwelling unit in a multiple-purpose structure, used for residential purposes. Commercial property does not include any of the following:
(i) Land.
(ii) Property of a public utility.
(d) (c) "Commission" means the state tax commission created by 1927 PA 360, MCL 209.101 to 209.107.
(e) (d) "Department" means the department of treasury.
(f) (e) "Facility", except as otherwise provided in this act, means a building or group of contiguous buildings.
(g) (f) "Functionally obsolete" means that term as defined in section 2 of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2652.
(h) (g) "Obsolete properties tax" means the specific tax levied under this act.
(i) (h) "Obsolete property" means commercial property or commercial housing property, that is 1 or more of the following:
(i) Blighted, as that term is defined in section 2 of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2652.
(ii) A facility as that term is defined under section 20101 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.20101.
(iii) Functionally obsolete.
(j) (i) "Obsolete property rehabilitation district" means an area of a qualified local governmental unit established as provided in under section 3. Only those properties within the district meeting the definition of "obsolete property" are eligible for an exemption certificate issued pursuant to under section 6.
(k) (j) "Obsolete property rehabilitation exemption certificate" or "certificate" means the certificate issued pursuant to under section 6.
(l) (k) "Qualified local governmental unit" means 1 or more of the following:
(i) A city with a median family income of 150% or less of the statewide median family income as reported in the 1990 federal decennial census that meets 1 or more of the following criteria:
(A) Contains or has within its borders an eligible distressed area as that term is defined in section 11(u)(ii) and (iii) of the state housing development authority act of 1966, 1966 PA 346, MCL 125.1411.
(B) Is contiguous to a city with a population of 500,000 or more.
(C) Has a population of 10,000 or more that is located outside of an urbanized area as delineated by the United States bureau Bureau of the census.Census.
(D) Is the central city of a metropolitan area designated by the United States office of management and budget.Office of Management and Budget.
(E) Has a population of 100,000 or more that is located in a county with a population of 2,000,000 or more according to the 1990 federal decennial census.
(ii) A township with a median family income of 150% or less of the statewide median family income as reported in the 1990 federal decennial census that meets 1 or more of the following criteria:
(A) Is contiguous to a city with a population of 500,000 or more.
(B) All of the following:
(I) Contains or has within its borders an eligible distressed area as that term is defined in section 11(u)(ii) of the state housing development authority act of 1966, 1966 PA 346, MCL 125.1411.
(II) Has a population of 10,000 or more.
(iii) A village with a population of 500 or more as reported in the 1990 federal decennial census located in an area designated as a rural enterprise community before 1998 under title XIII of the omnibus budget reconciliation act of 1993, Public Law 103-66. , 107 Stat. 416.
(iv) A city that meets all of the following criteria:
(A) Has a population of more than 20,000 or less than 5,000 and is located in a county with a population of 2,000,000 or more according to the 1990 federal decennial census.
(B) As of January 1, 2000, has an overall increase in the state equalized valuation of real and personal property of less than 65% of the statewide average increase since 1972 as determined for the designation of eligible distressed areas under section 11(u)(ii)(B) of the state housing development authority act of 1966, 1966 PA 346, MCL 125.1411.
(m) (l) "Rehabilitation" means, except as otherwise provided in subdivision (n), changes to obsolete property other than replacement that are required to restore or modify the property, together with all appurtenances, to an economically efficient condition. Rehabilitation includes major renovation and modification including, but not necessarily limited to, all of the following:
(i) The improvement of floor loads. ,
(ii) The correction of deficient or excessive height. , new
(iii) New or improved fixed building equipment, including heating, ventilation, and lighting. , reducing
(iv) Reducing multistory facilities to 1 or 2 stories. , adding
(v) Adding additional stories to a facility or adding additional space on the same floor level not to exceed 100% of the existing floor space on that floor level. , improved
(vi) Improved structural support including foundations. , improved
(vii) Improved roof structure and cover. , floor
(viii) Floor replacement. , improved
(ix) Improved wall placement. , improved
(x) Improved exterior and interior appearance of buildings. , and other
(xi) Other physical changes required to restore or change the obsolete property to an economically efficient condition.
(n) Rehabilitation shall does not include improvements aggregating less than 10% of the true cash value of the property at commencement of the rehabilitation of the obsolete property.
(o) (m) "Rehabilitated facility" means a commercial property or commercial housing property that has undergone rehabilitation or is in the process of being rehabilitated, including rehabilitation that changes the intended use of the building. A rehabilitated facility does not include property either of the following:
(i) Property that is to be used as a professional sports stadium. A rehabilitated facility does not include property
(ii) Property that is to be used as a casino. As used in this subdivision, subparagraph, "casino" means a casino or a parking lot, hotel, motel, or retail store owned or operated by a casino, an affiliate, or an affiliated company, regulated by this state pursuant to under the Michigan gaming control and revenue act, the Initiated Law of Gaming Control and Revenue Act, 1996 IL 1, MCL 432.201 to 432.226.
(p) (n) "Taxable value" means the value determined under section 27a of the general property tax act, 1893 PA 206, MCL 211.27a.
Sec. 6. (1) Not more than 60 days after receipt of a copy of the application and resolution adopted under section 5, the commission shall approve or disapprove the resolution.
(2) Following approval of the application by the legislative body of the qualified local governmental unit and the commission, the commission shall issue to the applicant an obsolete property rehabilitation exemption certificate in the form the commission determines, which shall must contain all both of the following:
(a) A legal description of the real property on which the obsolete facility is located.
(a) (b) A statement that unless revoked as provided in this act the certificate shall remain remains in force for the period stated in the certificate.
(b) (c) A statement of the taxable value of the obsolete property, separately stated for real and personal property, for the tax year immediately preceding the effective date of the certificate after deducting the taxable value of the land and personal property other than personal property assessed pursuant to under sections 8(d) and 14(6) of the general property tax act, 1893 PA 206, MCL 211.8 and 211.14.
(d) A statement of the period of time authorized by the legislative body of the qualified local governmental unit within which the rehabilitation shall be completed.
(e) If the period of time authorized by the legislative body of the qualified local governmental unit pursuant to subdivision (d) is less than 12 years, the exemption certificate shall contain the factors, criteria, and objectives, as determined by the resolution of the qualified local governmental unit, necessary for extending the period of time, if any.
(3) Except as otherwise provided in this section, the effective date of the certificate is the December 31 immediately following the date of issuance of the certificate.
(4) The commission shall file with the clerk of the qualified local governmental unit a copy of the obsolete property rehabilitation exemption certificate, and the commission shall maintain a record of all certificates filed. The commission shall also send , by certified mail, a copy of the obsolete property rehabilitation exemption certificate to the applicant and the assessor of the local tax collecting unit in which the obsolete property is located.
(5) Notwithstanding any other provision of this act, if a qualified local governmental unit passed a resolution approving an application for an obsolete property rehabilitation exemption certificate on November 5, 2008 for a rehabilitated facility located in an obsolete property rehabilitation district established on January 29, 2003 with rehabilitation commencing on July 24, 2007, the effective date of the certificate shall be is December 31, 2008.
(6) If the commission receives an application under this act for an obsolete property rehabilitation exemption certificate and the application is made complete before the October 31 following the year in which the application is received by the commission, the commission may issue for that property an obsolete property rehabilitation exemption certificate that has an effective date of December 31 of the year in which the application was received by the commission.
(7) (6) If an error or mistake in an application for an obsolete property rehabilitation exemption certificate is discovered after the legislative body of the qualified local governmental unit has approved the application or after the commission has issued a certificate for the application, an applicant may submit an amended application in the same manner as an original application under section 4 that corrects the error or mistake. Pursuant to sections section 5 and 6, this section, the legislative body of the qualified local governmental unit and the commission may approve or deny the amended application. If the commission previously issued a certificate for the original application and approves an amended application under this subsection, the commission shall issue an amended certificate for the amended application pursuant to section 6 this section with the same effective date as the original certificate.
(8) (7) If the clerk of the qualified local governmental unit failed to forward an application that was approved by the legislative body of the qualified local governmental unit before October 1 of that year to the commission before October 1 but filed the application before March 30 of the immediately succeeding year and the commission approves the application, notwithstanding any other provision of this act, the certificate shall be is considered to be issued on December 31 in the year in which the qualified local governmental unit approved the application.
(9) (8) Beginning October 1, 2013, the commission shall do all of the following for each obsolete property rehabilitation exemption certificate approved or disapproved by the commission under subsection (6) or (7) or (8):
(a) Notify the office of the member of the house of representatives of this state and the office of the senator of this state, who represent the geographic area in which the property covered by the application for a certificate is located, that an application for a certificate has been approved or disapproved under subsection (6) or (7) or (8).
(b) Publish on its website a copy of the certificate if approved, or a copy of the denial notice if disapproved, under subsection (6) or (7) or (8) and whatever additional information the commission considers appropriate regarding the application.
Sec. 7. (1) A rehabilitated facility for which an obsolete property rehabilitation exemption certificate is in effect, but not the land on which the rehabilitated facility is located, or personal property other than personal property assessed pursuant to under sections 8(d) and 14(6) of the general property tax act, 1893 PA 206, MCL 211.8 and 211.14, for the period on and after the effective date of the certificate and continuing so long as the obsolete property rehabilitation exemption certificate is in force, is exempt from ad valorem property taxes collected under the general property tax act, 1893 PA 206, MCL 211.1 to 211.157.211.155.
(2) Unless earlier revoked as provided in section 12, an obsolete property rehabilitation exemption certificate shall remain remains in force and effect for a period to be determined by the legislative body of the qualified local governmental unit. The certificate may be issued for a period of at least 1 year, but not to exceed 12 years. If the number of years determined is less than 12, the certificate may be subject to review reviewed by the legislative body of the qualified local governmental unit and the certificate may be extended. The total amount of time determined for the certificate including any extensions shall must not exceed 12 years after the completion of the rehabilitated facility. The certificate shall commence with commences on its effective date and end ends on the December 31 immediately following the last day 30 of the last year of the number of years determined. The date of issuance of a certificate of occupancy, if required by appropriate authority, shall be is considered the date of completion of the rehabilitated facility.
(3) If the number of years determined by the legislative body of the qualified local governmental unit for the period a certificate remains in force is less than 12 years, the review of the certificate for the purpose of determining an extension shall under subsection (2) must be based upon on factors, criteria, and objectives that shall be are placed in writing, determined and approved at the time when the certificate is approved by resolution of the legislative body of the qualified local governmental unit and sent, by certified mail, to the applicant, the assessor of the local tax collecting unit in which the obsolete property is located, and the commission.
Sec. 14. Not later than October June 15 each year, each qualified local governmental unit granting an obsolete property rehabilitation exemption shall report to the commission on the status of each exemption. The report must include the current value of the property to which the exemption pertains, the value on which the obsolete property rehabilitation tax is based, a current estimate of the number of jobs retained or created by the exemption, and a current estimate of the number of new residents occupying commercial housing property units covered by the exemption.
Sec. 16. A new exemption shall must not be granted under this act after December 31, 2026, 2036, but an exemption then in effect shall continue on that date continues until the expiration of the exemption certificate.
Sec. 17. (1) Within 60 days after After the granting of an obsolete property rehabilitation exemption certificate under section 6 for a rehabilitated facility, the state treasurer may, for a period not to exceed 6 years, exclude up to 1/2 of the number of mills levied for school operating purposes under the revised school code, 1976 PA 451, MCL 380.1 to 380.1852, and under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, from the specific tax calculation on the facility under section 10(2)(b) if the state treasurer determines that reducing the number of mills used to calculate the specific tax under section 10(2)(b) is necessary to reduce unemployment, promote economic growth, and increase capital investment in qualified local governmental units.
(2) The state treasurer shall not grant more than 25 45 exclusions under this section each year.